The majority of Germany’s 2.8 million students are dependent on inexpensive accommodation. Yet state-subsidized housing is scarce, and in the classic housing market a growing number of students are competing with young workers, apprentices and the elderly, who are increasingly discovering the benefits of life in the city. In addition, there is too little building activity in most university cities - and what there is mostly involves luxury lofts and detached houses, and little in the way of student apartments.
As a result, the student housing cost burden is rising rapidly, as evidenced by the Student Housing Price Index compiled by the German Economic Institute (IW) and Deutsche Real Estate Funds (DREF) in cooperation with ImmobilienScout24, a property website. The index has been investigating the market for student housing in 15 major cities and university towns since 2010. In Osnabrück, Munich, Stuttgart and especially in Berlin, rents have recently soared. With large numbers continuing to move to the big cities and construction activity expanding only slightly, this situation is unlikely to change in the near future.